CVS Cigarette Ban Will Drive Away $2 Billion in Sales

CVS Caremark earned a lot of praise and goodwill when it announced in February that it would stop selling cigarettes in its 7,700 stores—and it didn’t come cheap. After the company’s latest earnings report, we now have a real sense of the tobacco-free toll on the drugstore chain’s business: $2 billion in lost revenue over a full year.

Executives confirmed that eye-popping estimate after a little prodding on an earnings call (PDF). In the second quarter, the company said, sales at the front end of CVS stores where the cigarettes have been kept dropped 0.4 percent. Some stores are still in the cigarette-selling business. The self-imposed deadline to remove all tobacco products doesn’t come until October, so the modest drop in sales up front last quarter might come from stores that have stopped replenishing inventory.